Accounting in Action I
The process of planning, recording, analyzing and interpreting information.
Accounting
An amount owed.
Liability
A business owned by one person.
Proprietorship
The amount remaining after the value of all liabilities is subtracted from the value of all assets.
Owner's Equity
The differences between the increases and decreases in an account.
Account Balance
Asset
The difference between personal assets and personal liabilities.
Net Worth / Equity/ Capital
The standards and rules that Accountants follow as generally accepted accounting principles.
GAAP
The equation showing the relationship among assets, liabilities, and owner's equity.
Accounting Equation
An account used to summarize the owner's equity in a business.
Capital Account
Reports that summarize the financial condition and operations of a business.
Financial Statements
The difference between assets and liabilities.
Equity
A business that purchases and resells goods at a high price to the consumer
Merchandising Business / Retail Business
Accountants call any economic event that changes assets, liabilities, or owner's equity.
Transaction
A person or business to whom a liability is owed.
Creditor
A formal report that shows what an individual owns, owes, and the difference between the two.
Balance Sheet
The principles of right and wrong that guide an individual in making decisions.
Ethics
A business that performs an activity for a fee.
Service Business
A record that summarizes all the transactions pertaining to a single item in the accounting equation.
Account/Account Ledger
The accounting equation.
Assets = Liabilities + Owner's Equity
Process designed to compile financial data and summarize the results in accounting records and reports.
Accounting Process
The use of ethics in making business decisions.
Business Ethics
Financial rights to the assets of a business.
Owners Equity
The name given to an account.
Account Title
An increase in equity resulting from the sales of goods or services.
Revenue